UPDATED: Nissan Acceptance CEO Tapped as AFSA Chairman
WASHINGTON, D.C. — Steven Lambert, president and chief executive officer of Nissan Motor Acceptance Corp., will lead the American Financial Services Association as the group's 2008-2009 chairman.
He was installed during AFSA's recent 92nd Annual Meeting and Leadership Conference in Dallas.
"As the government and other policymakers pursue solutions for the turmoil occurring within the financial services marketplace, the industry must continue participating in the process," said Lambert.
"Now more than ever, we need the unifying voice of AFSA, which represents a cross section of creditors serving consumers and small businesses," he added.
During his one-year term, Lambert will preside over the AFSA Board and Executive Committee meetings, serve as an ex-officio member of all AFSA committees, and represent AFSA at industry and association-sponsored conferences and meetings.
In 1992, Lambert joined Nissan, where he was responsible for forecasting, budgeting and financial planning for the sales department. He moved up to director of financial planning and budgeting of Nissan North America before assuming his current role in 2002.
Before joining Nissan in 1992, Lambert was section head for sales, earnings, cash and tax planning at Hughes Aircraft Co.
To help the members get to know their new chair, AFSA interviewed Lambert about his background and aspirations as well as his views on the association and the industry.
1. What brought you to Nissan Motor Acceptance Corporation (NMAC)?
I started my career with Nissan in the finance department in 1992 after working for four years in the financial planning department for Hughes Aircraft Company, a defense contractor.
When I first joined Nissan, I was responsible for the sales department's forecasting, budgeting and marketing analysis. As Nissan consolidated its North American operations, my role expanded to perform these functions for manufacturing plants and NMAC as well. In 1999, I became responsible for overseeing the forecasting, budgeting, and financial planning for the entire US operation. Then in 2002, I was promoted to president and CEO of NMAC.
I benefited a great deal from seeing the financial side of the business first. Still, taking over the entire company — including the operation side in addition to financing — was an interesting challenge.
2. Has the financial services industry lived up to your career expectations?
The auto industry has lived up to my expectations. While most people understand the auto industry and they have bought or sold a car, those same people do not understand vehicle financing. It's been exciting to learn that side and has opened my eyes to the connection between manufacturing and marketing of a vehicle and the sale of that vehicle. You can't sell a car unless you finance a car.
3. During your years in the vehicle finance industry, what are some of the significant changes that you've seen? How has your company adapted to these changes?
Financing has been cyclical in terms of interest rates for buying versus leasing a vehicle and the blend of the two. The low post-9/11 APRs offered by many automakers set a bar for consumers' expectation for financing. Lowering rates kept cars rolling, but set an unsustainable expectation. As APRs softened over time, leasing became more popular.
The industry is now facing issues associated with the large volume of vehicles leased in 2004 through 2007 returning to the dealership in difficult financial times.
NMAC has been working closer with the sales and marketing arm of Nissan to ensure we are adapting our operations to handle today's economic pressures. You need to understand the market on a weekly basis or get left behind. It is critical to match production levels to demand levels and use the captive finance arm as a tool to keep inventories low and efficient.
4. The past year has been very challenging for all sectors of the financial services industry. What do you think the next year will bring?
We are facing interesting times, to say the least, in the financial services industry. I think the next year will bring continued challenges. I don't see the credit markets working through this situation for the next 12 months.
Problems started to emerge in August 2007, but we did not see the dramatic economic impacts on the markets until the credit situation became very severe in August 2008. Because it took a year for the situation to develop into what it has today, I don't anticipate a quick thaw of the credit markets. I think that the overall cost of borrowing will remain high for the next 6-12 months. Unfortunately, investors need time to re-gain confidence in asset-backed securities, and the strain will be felt over the next year.
The companies that right size costs will be able to flourish and survive in difficult times.
5. How has AFSA helped the industry during the recent turmoil in the financial services marketplace? Could the association have done anything differently?
AFSA is trying to be the voice of reason and help the federal government and regulators to understand how important credit is to consumers. Credit used in a reasonable, responsible manner is critical to economic growth. AFSA is not advocating granting credit for credit's sake. The country needs appropriate credit made available at an appropriate limit, in a responsible way.
AFSA has been quite responsive to federal propositions, commenting and making requests so the government and regulators will understand the impact on the market. AFSA also aims to influence a responsible outcome.
Representing all the interests of a broad base of constituents — from large to small companies — both consistently and fairly is a difficult task. However, AFSA serves its members in a way that communicates Americans' need for access to credit that is priced appropriately and responsibly.
6. Why do you think AFSA is so important to its member companies? To the financial services industry?
AFSA represents a national and state view. Member companies can gain efficiency by tapping into AFSA's knowledge base without having to invest individually in the resources.
AFSA provides a unifying voice for the large cross-section of the credit and financial services industry that it represents. The voice of a sizable trade association is more likely to be heard than individual requests.
To me, AFSA is about unification and representing the needs of the American people by making sure they can participate responsibly in credit markets.
7. A number of trade associations service the financial services industry. How can AFSA stand out from the others?
AFSA is the one organization that cuts across all financial services. The association's broad member base necessitates wearing different caps to serve every member. Other associations are more specialized. AFSA has continued to grow where others have not had that opportunity. Our members see value in being diverse and having transparency between companies.
8. Can you offer some insight about the value AFSA's Vehicle Finance Division offers its members?
The Vehicle Finance Division is one of the stronger groups in AFSA and has good leadership.
The captive members of the division have continued to change their structure in the last two years, and have had the opportunity to share information about new practices and industry trends.
The division has been successful by standing should-to-shoulder on specific issues, such as vicarious liability. Last year, the group supported one response on the subject that demonstrated a unified voice to industry and regulators.
9. How would you encourage members to get the most out of their AFSA membership?
Be active. If you are not attending conferences or working on subteams, you're not getting the most out of your membership. You don't have to spend a lot of time or money to play a role in the association. Nowadays, you can be an active participant via technology, which saves time and money. Through AFSA, financial services professionals can share ideas and tap into industry trends while meeting colleagues and competitors in the same area of focus.
10. What do you hope to accomplish as AFSA Chairman?
In the turbulent months ahead, I hope to keep our members unified and strong. I know some companies may be tempted to cut costs by not renewing their membership in AFSA, but it would be a mistake. Being active in AFSA is even more important in these troubled times to keep you informed and ahead rather than being caught flat-footed when things change or challenges arise.
As we work through the economic difficulties under AFSA's strong, clear voice, we will have more opportunities for stability and growth. If AFSA continues to speak with a strong voice, it can help shape the recovery that has to be implemented in the next 12-18 months.
AFSA is a national trade association representing the consumer credit industry, protecting access to credit and consumer choice.
Its 350 members include consumer and commercial finance companies, auto finance/leasing companies, mortgage lenders, credit card issuers, industrial banks and industry suppliers. More information can be found at www.afsaonline.org.